SOLAR ELECTRIC / PHOTOVOLTAICS
COST AND INCENTIVES

From our observations, Photovoltaic Grid-Tied Solar Electric Systems seem to range in cost from $9.00 to $12.00 per watt installed. This could mean if you had a 3000 watt system installed, you would be looking at an installation price of between $27,000.00 and $36,000.00. The reason for the price difference is due to the complexity of the installation and the kind of solar electric panels you choose. Ours prices are higher than many and lower than others. What we feel we offer better than most, is our hands on approach to each and every install. Even before a job is started, we bring to each potential project personal and courteous customer service. This is something we provide all along. We pick up our phones. If we are going to be late or if there is some deviation from expectations, we are on the phone discussing it. We also like to think of our installations as pieces of art, masterfully installed. We care about the quality of the components used and the eye for detail installations should have.

When looking at prices, one of the first thing folks want to know is what kind of an impact certain size systems will have on their electric bill. The answer to this question is… it depends. The average household in Portland consumes between 10,000 and 12,000 kilowatt hours in a year. In Portland the amount of watts a system is rated for ironically is also the amount of kilowatts the system will generate throughout the course of a year. For example, a 3,000 watt system mentioned above will produce +/- 3,000 kilowatt hours a year. To learn more about these Photovoltaic Grid-Tied Systems click here or go to our PV FAQ page.

There are a couple of site specific technical specifications concerning your potential solar site which one has to be aware of. One of the first things you want to think about when considering solar is how good of a solar site you have. The incentives that exist are only really meant to incent solar systems placed on the most optimal of locations. In other words, in order to get your hands on these incentives, your house has to have a roof that has access to 75% or more of the yearly sun. This means you really can’t have any shade falling on the roof where you want your solar system installed from 8am to 6pm. One’s roof does have that 25% leeway, but it gets used up pretty fast. The other specification to be aware of is the life left remaining on your roof. The Energy Trust, especially, wants the roof your solar system goes on to have at least 15 years or more left remaining on it. If this is not something you can remember or verify and the roof life is a bit iffy, you should call a home inspector or a roofer to come on out and take a look at things. Make sure they leave you something in writing as proof you have 15 years or more left remaining on your roof. Finally, don’t feel you can’t go solar just because you don’t have a perfect solar site and are not eligible for the incentives. Every year Solar Energy Solutions, Inc. installs systems which fall outside of the ideal scenario the incentives are set up to support. The incentives are great, but not essential to an installation occurring.

Before we go any further we should probably address the irrelevant yet omnipresent issue of… Payback. Simply put, there is none. Just like a car, TV, deck, hot tub or whatever, the payback is in having something you want, not on recouping the costs. However, unlike any of the aforementioned things, there are strong economic reasons to considering going solar. A Solar system will quadruple in value over the course of 10 years due to energy prices quadrupling every ten years or so. Solar systems will give you a 1% to 5% return on investment that is completely risk free and tax free. That is pretty exciting. And, solar systems increase your property value by the cost of the systems, yet because of the incentives, only cost you a fraction of that total. Of course, my favorite incentive is conservation. If conservation is not on your mind even a little bit and simple payback the only thing of relevance to your decision to go solar, solar may not be for you.

There are currently three entities which incent the installation of Grid-Tied Photovoltaic Systems. The Energy Trust of Oregon, The Oregon Department of Energy, through a State Income Tax Credit, and the Federal Government with a Federal Income Tax Credit.

The Energy Trust of Oregon is an entity formed in 2005. It exists and is funded by money it receives through PGE, Pacific Power and Northwest Natural Gas. There are also a number of smaller utilities that pay into the program. These utility companies take 3% of the money we pay them in our bills and redirect it to the Energy Trust. The Energy Trust then redistributes this money into Renewable Energy, and energy conservation programs. The way this pens out for solar is in direct Reduction in Price Incentives. The reduction in price incentive varies by system performance and utility area. It varies system by system because the incentive is a performance based incentive and different sized Photovoltaic Systems produce different amounts of energy savings. It varies by utility company because a Monarch butterfly landed a budding rose that was then plucked and placed on Jim Morrison’s grave. In other words… we don’t know. What we do know is in PGE land the Energy Trust incentive is $2.25 per watt up to $10,00.00 and in PP&L land it is $2.00 per watt up to $10,000.00. The greater the energy savings, the greater the reduction in price incentive from the Energy Trust. For Example: If you had Solar Energy Solutions, Inc. install a system that cost $30,000.00 and lived in PGE land, you would qualify for a $6,750.00 reduction in price incentive. This $6,750.00 comes right off the top of what you would otherwise pay Solar Energy Solutions, Inc. This means your out of pocket cost to Solar Energy Solutions, Inc would be $23,250.00.

$30,000.00 Installed cost

- $6,750.00 Minus Energy Trust Incentive

$23,250.00 Equals your out of pocket cost.

Remember, different sized systems qualify for different incentives bases upon size and utility.

The Oregon Department of Energy has been on the cutting edge of encouraging people to go solar with tax credits since 1986. Oregon’s state income tax credit program for solar has always been an example to the rest of the nation as one of the best. Like the incentive from the Energy Trust of Oregon, the State Income Tax Credit is based on the performance of a system. Different systems qualify for different tax credit incentives. Also, like the Energy Trust, the state is only looking to incent ideal solar scenarios. The Oregon Department of Energy is a little looser than the Energy Trust and does not have a roofing specification and allows lesser tax credits for systems mounted on roofs with 50% to 75% of the annual available sun. The maximum state income tax credit for a Photovoltaic System is $6,000.00. This $6,000.00 tax credit is absorbed over a four year period of time in $1,500.00 increments. You get this tax credit incentive when you file your state income taxes. Remember, this is a tax credit, not a tax deduction. Tax credits are better than tax deductions because they come right off of you state income tax liability. For Example: Say you have paid the State of Oregon $4,000.00 in income taxes throughout the course of the year. Because of deductions and allowances, say you get $500.00 back. Well, if you install a large enough Photovoltaic system you get back $1,500.00 a year, for four years, additionally. People are always complaining about how they never get anything for their tax dollar. Here is a way you can get your tax dollar right back into your pocket and install a solar system to boot. Remember, you have to pay a state income tax in order to get the tax credit. If your income tax liability is low, the state gives you up to 5 years to absorb the full amount.

I remember when I received my $1,500.00 tax credit when I installed my solar hot water system in 1992. In was an afternoon in May and I was doing some office work when I heard the Mailman come to the door. On this particular day he only had one piece of mail and it was from the Oregon Department of Revenue. With one eye closed and the other half open, I opened the letter wondering what the bad news could be. But then, as I peaked inside, what should my wary eyes see?... A check for $1,500 bucks. Yippee! I said as I ran through the offices yelling, “Isn’t government GREAT!” How often can a person yell that?!

The final place currently available for solar incentives is the Federal Government. Until the end of 2008, there is a 30% Federal Income Tax Credit up to $2,000.00. Unlike any of the other incentive, there are no technical or solar site specifications on this incentive. No matter how big or small your system is, how sunny or shady your site is, how new or old your roof is, you qualify for the Federal Income Tax Credit. However, it does assume you pay what is called a minimum Federal Tax. So, it would be wise to talk to your tax person first on this matter. But, assuming you qualify, it is like the State Income Tax Credit, a dollar for dollar tax credit, going against your Federal income tax liability. Unfortunately, the Federal Tax Credit for Solar is going away by the end of 2008. So unless it is renewed, it is gone and systems must be installed and functioning by the end of 2008.

To summarize. If Solar Energy Solutions, Inc. installs the 3000 watt Photovoltaic system mentioned above for $30,000.00 it would qualify for the Energy Trust of Oregon reduction in price incentive of $6,750.00. It would also qualify for the State income tax credit of $6,000.00, (absorbed over a four year period of time in $1,500.00 increments) and a Federal income tax credit of $2,000.00. This means under this scenario, there would be a total of $14,750.00 in incentives. This would ultimately bring your total system cost down from $30,000.00 to $15,250.00. WOW!

$30,000.00 Installed Cost

- $6,750.00 Minus the Energy Trust reduction in price incentive

$23,250.00 Out of pocket cost

- $6,000.00 State Income Tax Credit

- $2,000.00 Federal Income Tax Credit

$15,250.00 Net Cost!